Designed to provide broad exposure to the Energy - Equipment and services segment of the equity market, the iShares U.S. Oil Equipment & Services ETF (
IEZ Quick Quote IEZ - Free Report) is a passively managed exchange traded fund launched on 05/01/2006.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Equipment and services is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
The fund is sponsored by Blackrock. It has amassed assets over $344.27 million, making it one of the larger ETFs attempting to match the performance of the Energy - Equipment and services segment of the equity market. IEZ seeks to match the performance of the Dow Jones U.S. Select Oil Equipment & Services Index before fees and expenses.
The Dow Jones US Select Oil Equip & Serv Ind is a free-float adjusted market capitalization-wghtd index. It measures the performance of oil equipment & services sector of US equity market by including companies that are suppliers of equipment or services to oil fields & offshore platforms, such as drilling, exploration, engineering, logistics, seismic information services & platform construction.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.42%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.61%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Schlumberger Nv (
SLB Quick Quote SLB - Free Report) accounts for about 22.49% of total assets, followed by Halliburton ( HAL Quick Quote HAL - Free Report) and Championx Corp ( CHX Quick Quote CHX - Free Report) .
The top 10 holdings account for about 74.73% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Oil Equipment & Services ETF has added roughly 8.17% so far, and is up about 86.88% over the last 12 months (as of 04/23/2021). IEZ has traded between $6.74 and $15.90 in this past 52-week period.
The ETF has a beta of 2.61 and standard deviation of 54.19% for the trailing three-year period, making it a high risk choice in the space. With about 28 holdings, it has more concentrated exposure than peers.
IShares U.S. Oil Equipment & Services ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. IEZ, then, is not a great choice for investors seeking exposure to the Energy ETFs segment of the market. However, there are better ETFs in the space to consider.
SPDR S&P Oil & Gas Equipment & Services ETF (
XES Quick Quote XES - Free Report) tracks S&P Oil & Gas Equipment & Services Select Industry Index and the VanEck Vectors Oil Services ETF ( OIH Quick Quote OIH - Free Report) tracks MVIS U.S. Listed Oil Services 25 Index. SPDR S&P Oil & Gas Equipment & Services ETF has $140.95 million in assets, VanEck Vectors Oil Services ETF has $1.07 billion. XES has an expense ratio of 0.35% and OIH charges 0.35%. Bottom Line
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Zacks ETF Center.